The plan was simple: Thailand’s government would buy rice from local farmers at a generous price, some 50 percent above the market rates. It would hold the rice in warehouses, cutting off exports to the rest of the world. The sudden shortage from the world’s heavyweight champion of rice exports would cause a spike in global prices. Then, payday for the government as it swung open the warehouse doors and sold its stockpile to the world at a premium. Farmers win, the government wins, foreign consumers lose, but then they don’t vote in Thai elections, so what do they matter? The plan was a political no-brainer, except for one problem: Thailand’s government underestimated how quickly the market can kick back at any would-be puppeteers.

“If any government thinks they are living above the market, they are living in a fool’s paradise,” says Tejinder Narang, a former rice trader who now advises one of India’s largest grain exporters, Emmsons International. Narang reads a running stream of news reports, trade publications, monthly studies – any news that will keep him up to date on the latest machinations of the market. When he saw Thailand’s pledge to hike up the price of rice, he says he and virtually every global trader knew how to respond. With the click of a mouse, or sometimes a quick phone call, his traders in Dubai could switch their purchases from Thailand to suppliers in India, Pakistan, Myanmar, or Vietnam. “It doesn’t take five minutes,” he says. “There are no government-to-government contracts. There are only business-to-business contracts. I can buy anything from anywhere.” And it was Thailand’s great misfortune that exactly one week after it slashed exports, India lifted its export ban, flooding the market with 10 millions tons of rice. Rather than orchestrate a price hike, Thailand helplessly stood by as global prices sank.

David Dawe, a senior economist with the U.N.’s Food and Agriculture Organization, can look at a spreadsheet of historic rice prices and see a roller coaster of emotions. He points to June 2011, when the current Thai administration was campaigning on its rice plan. Even before the election, rice traders had anticipated the coming shortage and bid up the price. “You’ve got this big bump of $100 a ton,” says Dawe. “Thais were probably pretty happy at that point, thinking, ‘Okay not too bad, we can probably drive them even higher.’” Then, in September of 2011, shortly after Prime Minister Yingluck Shinawatra’s administration was swept into office on a wave of votes from the farming sector, India opened the floodgates. Dawe points to this moment and says, “Reality sets in. The Vietnamese started lowering their prices and the Thais just got left behind.” Over the next year, Thailand was knocked from its perch as the world’s top exporter of rice, tumbling behind India and landing just short of Vietnam.

Not that Thailand’s rice farmers have become any less productive. The government stockpiles their produce, an estimated 17 million tons, in mills across the country. It has completed part “A” of the plan, buy rice at a premium. It’s part “B,” selling it at a premium, that’s proving devilishly tricky. For a year, the government has shied away from public scrutiny of the program, but Moody’s, the credit rating agency, blew the lid off of the story last month when it warned that the program could swallow up an astonishing 8 percent of the national budget, forcing the agency to reevaluate the government’s credit rating. For a government already mired in debt, the warning shot from Moody’s “crystallized their thinking,” Dawe says.

Yingluck, whose Pheu Thai Party draws its support from the country’s rural northeast, has said the program has achieved its goal of boosting incomes for poor, rural farmers. She has now urged them to now give her administration the flexibility to modify the program. In a public address on a local television series, “Yingluck Government Meets the People,” she said the program would remain in place, and that the government would continue to purchase rice, but it may have to reduce its purchase price to make the program sustainable. As for the Moody’s report, she has promised to rebut the findings with a government investigation into the true cost of the program.

In the meantime, her administration has to bat away daily reports on the rice “scheme,” as the local papers call it. Stories hint at galloping costs and widespread corruption. The government has acknowledged the program has already cost $4.4 billion in its first year. How much it will eventually cost depends on a factor outside of the government’s control, the global price of rice. Narang takes a dim view of the government’s ability to extricate itself from its mess. “It is easy to distort the market by iterations,” he says, “but it is very difficult to correct the market by intervention.” He adds, “The governments are never rational. The governments are political,” suggesting that the rational politician is an oxymoron.

He has a point. Pressed to name a single independent economist who thought Thailand’s rice plan would work, Dawe paused for a moment to think, then answered, “Not that I know of.” One of the more optimistic forecasts, from Sam Mohanty at the International Rice Research Institute (yes, it exists), predicted that Thailand could at best drive up prices for one growing season. Still, he advised against it. Could the policy-makers have been so fixated on votes that they missed the near unanimous warnings coming from market experts?

Dawe offers a slightly more sympathetic take. Although Thailand has a strong manufacturing sector, he observes that country is still in the process of transformation from agrarian to industrial economy, and this opens up gaping inequalities between urban and rural areas, farmers and non-farmers. “Politicians feels they have to respond to this,” he says, “so they support farmers.” In a sign of how powerful that imperative can be, Thailand’s government recently announced that it would cut the now significantly inflated purchase price of rice by a mere 20 percent. The farmers protested, the government reversed course, and now the matter is working its way through a committee chaired by farmers and officials. Meanwhile, Thailand’s 17-million-ton burden shows no signs of easing.